8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  October 14, 2015

Winmark Corporation

(Exact Name of Registrant as Specified in Its Charter)

Minnesota

(State or Other Jurisdiction of Incorporation)

000-22012	41-1622691
(Commission File Number)	(I.R.S. Employer Identification Number)

605 Highway 169 North, Suite 400, Minneapolis, Minnesota 55441

(Address of Principal Executive Offices)  (Zip Code)

(763) 520-8500

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02              Results of Operations and Financial Condition

On October 14, 2015, Winmark Corporation (the “Company”) announced in a press release its results of operations and financial condition for the third quarter ended September 26, 2015.  A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.

Item 7.01              Regulation FD Disclosure

On October 14, 2015, the Company announced in a press release its results of operations and financial condition for the third quarter ended September 26, 2015. A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.

Item 9.01              Financial Statements and Exhibits

(d)          Exhibits

99.1 Press Release dated October 14, 2015

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

WINMARK CORPORATION

	WINMARK CORPORATION
Date: October 14, 2015	By:	/s/ Anthony D. Ishuag
		Anthony D. Ishaug
		Chief Financial Officer and Treasurer

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EXHIBIT INDEX

to

Form 8-K

Winmark Corporation

Exhibit Number	Exhibit Description
99.1	Press Release dated October 14, 2015

4

EX-99.1

Exhibit 99.1

Contact:	Brett D. Heffes
	763/520-8500

FOR IMMEDIATE RELEASE

WINMARK CORPORATION ANNOUNCES

THIRD QUARTER RESULTS

Minneapolis, MN (October 14, 2015) – Winmark Corporation (Nasdaq; WINA) announced today net income for the quarter ended September 26, 2015 of $5,339,600 (or $1.23 per share diluted) compared to net income of $5,623,000 (or $1.09 per share diluted) in the third quarter of 2014.  For the nine months ended September 26, 2015, net income was $16,145,300 (or $3.39 per share diluted) compared to net income of $14,455,700 (or $2.76 per share diluted) for the same period last year.

The Company experienced modest royalty growth in the franchising business, while profits in the leasing business were lower when compared to last year due to the timing of customer activity in the portfolio.  Earnings per share growth during the quarter was positively impacted by the previously reported self-tender offer.

Winmark Corporation creates, supports and finances business.  At September 26, 2015, there were 1,133 franchises in operation under the brands Plato’s Closet®, Once Upon A Child®, Play It Again Sports®, Music Go Round® and Style Encore®.  An additional 104 retail franchises have been awarded but are not open.  In addition, at September 26, 2015, the Company had a lease portfolio of $40.3 million.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to future events or the future financial performance of the Company including statements with respect to our ability to finance the growth of our leasing and franchising businesses for the foreseeable future.  Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated.  Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.

WINMARK CORPORATION

CONDENSED BALANCE SHEETS

(unaudited)

	September 26, 2015			December 27, 2014
ASSETS
Current Assets:
Cash and cash equivalents	$	1,060,700		$	2,089,700
Marketable securities	226,500			466,800
Receivables, net	1,314,200			1,328,200
Net investment in leases - current	18,260,700			19,831,600
Income tax receivable	855,000			4,163,900
Inventories	59,600			93,500
Prepaid expenses	757,500			467,400
Total current assets	22,534,200			28,441,100
Net investment in leases – long-term	21,994,700			24,188,900
Property and equipment, net	1,218,800			1,420,300
Other assets	607,500			677,500
Deferred income taxes	419,400			—
	$	46,774,600		$	54,727,800
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Line of credit	$	—		$	18,500,000
Notes payable, net	1,988,700			—
Accounts payable	1,208,400			1,955,500
Accrued liabilities	3,139,800			1,759,200
Discounted lease rentals	75,800			227,300
Deferred revenue	2,139,200			2,142,600
Deferred income taxes	2,846,400			4,412,600
Total current liabilities	11,398,300			28,997,200
Long-Term Liabilities:
Line of credit	46,200,000			—
Notes payable, net	22,403,200			—
Discounted lease rentals	—			25,800
Deferred revenue	1,536,100			1,347,800
Other liabilities	1,248,800			1,403,200
Deferred income taxes	—			1,344,300
Total long-term liabilities	71,388,100			4,121,100
Shareholders’ Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 4,128,031 and 4,998,512 shares issued and outstanding	434,700			422,400
Accumulated other comprehensive loss	(33,700		)	(37,100		)
Retained earnings (accumulated deficit)	(36,412,800		)	21,224,200
Total shareholders’ equity (deficit)	(36,011,800		)	21,609,500
	$	46,774,600		$	54,727,800

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Quarter Ended						Nine Months Ended
	September 26, 2015			September 27, 2014			September 26, 2015			September 27, 2014
REVENUE:
Royalties	$	11,286,100		$	10,725,000		$	31,226,700		$	28,735,800
Leasing income	3,247,000			4,121,800			16,919,900			11,655,000
Merchandise sales	762,300			786,100			2,182,300			2,259,900
Franchise fees	483,200			558,200			1,253,500			1,514,700
Other	220,900			213,300			917,900			830,500
Total revenue	15,999,500			16,404,400			52,500,300			44,995,900
COST OF MERCHANDISE SOLD	711,600			742,300			2,055,600			2,156,300
LEASING EXPENSE	173,400			808,500			4,941,300			1,234,200
PROVISION FOR CREDIT LOSSES	38,800			(1,700		)	(123,400		)	26,100
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	5,733,900			5,677,600			18,226,700			17,874,500
Income from operations	9,341,800			9,177,700			27,400,100			23,704,800
INTEREST EXPENSE	(687,700		)	(150,500		)	(1,142,900		)	(356,700		)
INTEREST AND OTHER INCOME/(EXPENSE)	(12,400		)	27,200			(61,800		)	28,200
Income before income taxes	8,641,700			9,054,400			26,195,400			23,376,300
PROVISION FOR INCOME TAXES	(3,302,100		)	(3,431,400		)	(10,050,100		)	(8,920,600		)
NET INCOME	$	5,339,600		$	5,623,000		$	16,145,300		$	14,455,700
EARNINGS PER SHARE – BASIC	$	1.29		$	1.12		$	3.53		$	2.84
EARNINGS PER SHARE – DILUTED	$	1.23		$	1.09		$	3.39		$	2.76
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC	4,128,031			5,022,166			4,568,813			5,093,243
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED	4,338,230			5,156,785			4,758,158			5,235,949